Hyundai IPO Open tomorrow
Hyundai IPO Open tomorrow, Some investors are expressing concerns about Hyundai’s IPO valuation, viewing the price of Rs 1,960 per share as high. This price leads to an estimated price-to-earnings ratio of 26 times the projected earnings for FY25, surpassing Maruti Suzuki’s ratio of 22x and the industry average of 24.41x.
Additionally, it stands in stark contrast to the much lower PE ratio of 5x for its parent company, Hyundai Motor Global, which could raise further caution among potential investors.
Hyundai IPO Open tomorrow
As Hyundai Motor India Ltd (HMIL) launches its initial public offering (IPO) for public subscription on Tuesday, October 15, there’s a mix of excitement and caution. Hyundai aims to benefit from India’s strong market, where around 260 companies have raised over $9 billion in 2024.
This IPO, from India’s second-largest automaker after Maruti Suzuki, involves a complete sale of 14.2 crore shares by its Korean parent company, with a price set between Rs 1,865 and Rs 1,960.
Hyundai IPO Open tomorrow
Recent market corrections are affecting the share prices in the unlisted market. Before the IPO, the grey market premium (GMP), which gives an idea of how shares might perform when listed, is decreasing. Currently, the company’s shares have a GMP of Rs 60 in the unlisted market.
With the upper price set at Rs 1,960, this means there’s only a small premium of about 3% over the issue price, a significant drop from a premium of Rs 570 just two weeks ago when shares began trading in the unlisted market. However, it’s important to note that grey market premiums are only a general indicator of interest in the IPO and can change quickly.
Many people think that the price of Rs 1,960 at the top of the range is too high. At this price, Hyundai is valuing its shares at 26 times its expected earnings for FY25. In comparison, Maruti Suzuki is trading at a PE ratio of 22 times its FY25 earnings. Hyundai’s PE ratio is also higher than the industry average of 24.41 times and much more than its parent company Hyundai Motor Global, which has a PE ratio of just 5 times.
Hyundai IPO is a strong long-term bet
Hyundai IPO Open tomorrow is seen as a solid long-term investment opportunity. Analysts and brokerages generally agree that it could yield significant returns for those willing to hold onto their shares for an extended period Hyundai IPO Open tomorrow.
ICICI Direct noted, “We anticipate limited gains when the IPO lists, but we expect Hyundai India to provide healthy double-digit returns over the medium to long term.” Bajaj Broking added that while the pricing appears to be fully valued, the company has promising prospects due to ongoing expansions. Eight brokerages have given a “subscribe” rating for long-term investors, indicating a cautious approach to immediate gains, while three others have a standard “subscribe” recommendation.
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